I'm used to using CEX because it's simple and convenient, and I don't have much money so I'm not afraid of losing it. If you want to be safer, you can transfer the tokens to your personal wallet. When you need to sell, you just need to send it to the exchange for a few minutes to sell. Some tokens available on DEX are okay to connect to the wallet and trade right away, but the cost is quite high and I don't have a need to regularly trade, and BTC doesn't have any DEX to support it so I don't use.
Earning BTC on Binance is quite good for USDT, sometimes up to 10% per year, higher than savings interest in banks. Those who stake tokens like RON earn a higher APR, those who have BNB can receive airdrops from launchpool, CEX has many fun things that DEX doesn't have yet. I have little money so I don't worry about the floor breaking down.
It is normal and common for newcomers to worry that they will not be able to keep their private keys safe and lose access to the crypto assets in their accounts. CEXs are clearly a more friendly and familiar choice: easy to buy and sell right on the smartphone through an application, can quickly sell tokens for cash.
Many people also like to keep USDT on exchanges to earn profits, such as OKX which previously had a pretty good APR, or Binance recently also paid higher interest, I think it is because many traders borrow USDT to invest so the demand for USDT reserves of CEXs is quite large. CEX users just need to avoid letting their devices get infected with malware, then it is quite safe.
Both CEXes and DEXes are good and beneficial in every investor in whatever way it is.
1. CEX. The problem with DEXes as of this moment is the amount of tokens that it supports. I find it hard to move from one DEX to another just to buy a token that I want. I guess Metamask can do it's thing, but I find it more convenient to use CEXes like Binance, and Bitget than DEXes. The amount of features most CEX has currently is enough for investors to use it more than those DEXes right now. I guess what's attractive with DEXes right now is the fact that you can earn money thru providing liquidity on their pools.
2. Nowadays, most of the CEX requires KYC already, and I really wanted to use CEX like Binance so it doesn't impact me at all. It bothers me a bit because of the fact that you're giving away your personal information to some strangers online, but most don't really care if they will be more comfortable buying and selling the tokens different tokens.
3. No. Centralized Exchanges right now is large enough that DEX can't replace it anymore. The fact that these CEXes has lots of features to attract investors to use their platform is enough for them to stay on using it, and just completely ignore those DEXes out there.
Most investors probably feel the same way, and we still see CEXs continuously gaining new users instead of losing them over time. CEXs are still the simplest and most convenient option for new or experienced users, because CEXs provide extremely good liquidity, which DEXs cannot yet achieve. CEXs are also multichain platforms, and users do not need to worry about which chain their crypto assets are on and how to interact with them, through which wallet application...
I hope DEXs will develop more, have better liquidity, and we can use DEXs easily and at a lower cost in the future. DEXs have added many more services but still need a lot of time to catch up with CEXs. I think the development of cross-chain solutions will be one of the main drivers that will help users use DEXs more regularly.